Travel Insurance Considerations for Seniors

Travel-related incidents affect all age groups, but seniors need to be more attuned to medical situations when traveling.

By Jeff Schlegel

Making travel plans gets people excited about all of the fun they hope to have at their intended destination. But when crafting an itinerary to potentially maximize the good times, it’s a smart idea to account for unplanned events. Like, for example, a medical emergency overseas that requires you to be airlifted to a hospital and leaves you with a $50,000 tab that your health insurance provider won’t cover.

Situations like that is why travel insurance exists. In a nutshell, travel insurance is designed to cover various risks that can arise when traveling either home or abroad. The main coverage areas pertain to emergency medical assistance, trip cancellation or delay issues, lost baggage and damaged personal effects, and accidental death.

Travel-related incidents should be a consideration for people of any age group, but perhaps older folks need to be more attuned to medical situations when traveling.

While travel insurance isn’t specifically designed for senior citizens, this cohort (which for statistical purposes also includes late-stage baby boomers) does buy the most travel insurance of any demographic group, according to Squaremouth.com, an online travel insurance marketplace. Since 2019, travelers born in 1964 or before have purchased more than 40% of all travel insurance policies.

The reasons are twofold. For starters, retirees have the time — and presumably the money — to take longer, and thus more expensive trips in need of protection. And then there are healthcare considerations, especially pertaining to overseas travel.

Navigating the maze

Medicare is there for seniors when medical situations occur within the U.S. and its territories. But overseas medical incidents are a different story. As noted by the U.S. Centers for Medicare & Medicaid Services, there are three limited situations that allow for coverage outside the U.S. under Medicare Part A (hospital insurance) and/or Part B (medical insurance).

“Because Medicare has limited travel medical coverage outside the U.S., you may choose to buy a travel insurance policy to get more coverage,” advises the Medicare.gov website.

Okay, but the reality is that the travel insurance market is a maze with numerous providers and an assortment of plan options and cost structures. Travel insurance can be purchased from a variety of sources including the providers themselves, online travel agents, insurance brokers or other intermediaries. Some Medigap policies also cover foreign travel emergency care.

No matter the source, like with any insurance product it pays to shop around. And it’s vitally important to read the fine print to ascertain what is or isn’t covered by a particular policy.

Pre-existing medical conditions, for example, are typically excluded from coverage on most travel insurance policies both for medical and cancellation benefits, according to Steven Benna, lead data analyst at Squaremouth. However, some companies do provide coverage for a pre-existing condition for an added cost.

Elsewhere, medical emergencies resulting from risky activities such as parachuting, rock climbing or, perhaps, participating in the Running of the Bulls festival in Pamplona, Spain, generally aren’t covered by travel insurance policies. That said, some policies will provide coverage for adventure-oriented activities.

Comprehensive coverage

Travel insurance policies usually include a comprehensive package of benefits covering the aforementioned areas relating to trip cancellation and delays, medical and evacuation incidents, the need to buy essentials in the event of lost or delayed luggage, and lump sum payments for accidental death or loss of limb during a trip. And while many policies let you tack on upgrades for an additional premium. you can’t excise benefits from a plan in order to save money.

The cost for comprehensive policies can vary considerably. According to Squaremouth, a comprehensive travel insurance policy with trip cancellation coverage on average costs between 5% and 10% of the traveler’s total trip cost. Adding coverage that lets you cancel a trip for any reason can boost the policy’s premium by 40% to 50%.

Trip cancellation coverage provides 100% reimbursement for prepaid and non-refundable trip expenses if a person’s trip is cancelled for a reason specifically listed in the policy. Can-cancel-for-any-reason coverage can apply to events not listed in the policy.

Recent Squaremouth data covering the 30-day period ending February 21 found that the average trip cost for customers who used its site was roughly $6,400, the average trip length was 15 days, and the average travel insurance premium was $317.

Keep in mind that these are just averages. Key factors that influence the cost of a travel insurance policy include the travelers’ ages and the length and cost of the trip. Like with automobile insurance, older people will pay higher premiums.

“While each provider calculates their prices differently based on their target demographic, in general, a policy is more expensive for an older traveler,” according to Squaremouth.

Is it worth it?

Single-trip travel insurance policies provide coverage during the specified time period. Once you return home, that’s it. Annual travel insurance policies are available for people who plan to take multiple trips during a one-year period. There’s usually a 30- to 90-day cap for each of the planned trips, so it’s not meant for extended visits to one place beyond three months. Plan coverages can vary, but they generally entail emergency medical care and emergency medical transportation, along with protection against trip delays and lost or stolen luggage.

Annual travel insurance policies typically are less comprehensive than single-trip policies, but some providers offer more comprehensive options at higher premiums. Most of the basic plans don’t offer trip cancellation coverage.

Given the numerous options out there in terms of providers and available plans, along with variable costs, shopping for travel insurance at first blush can seem daunting. Fortunately, there are online marketplaces that can simplify the process. Squaremouth, for example, offers quotes and comparisons for 104 policies from 21 providers. It also has collected more than 118,000 customer reviews of these policies.

Other shop-and-compare sites include InsureMyTrip, Travelinsurance.com and AARDY, among others.

Is travel insurance right for everyone? All insurance is a crapshoot that’s wasted money if you don’t use it. But if it’s needed and you don’t have it, then you’ve got an “uh-oh” moment on your hands.

People who are in or near retirement have different considerations than Generation Y travelers, so they should think strategically and plan accordingly. That’s particularly the case if they’re going to a faraway, remote place with limited and/or subpar medical facilities. In other words, the kind of place where if an unforeseen medical event happens it could lead to an emergency airlift evacuation and subsequent medical care with potential out-of-pocket costs of $50,000 or thereabouts.

Jeff Schlegel has written about the financial services industry for the past quarter-century. 

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